SPY with another tight range today to 300 w/ 302-303 next resistance. So I've been getting some trading exposure in the Biotech's and quickly noticed the volatility. BIIB had earnings + news that a drug has met a phase 3 endpoint. There was solid volume in the pre-market and originally I had a long plan but a short plan was also in place. I will go over this learning experience in the the review section below. This trade was a core starter / tier 1 trade that turned into a solid working trade which I added a scalp to.
RVOL - 4.95
Avg Vol - 1.54M
ATR - 5.30
Short Float - 1.94%
Institutional Ownership - 91.80%
I entered the position short seeing that there was a failed attempt at an opening drive to take out the pre-market highs. I then watched to see price action after the quick push down. The price started holding below vwap and I entered around the next lower high with a cover above that and vwap.
Tier 1 (core position) was covered at the trend change shortly after the EQ forming at the LOD. I don't think there was much I could do here with the plan besides protecting profit. I wasn't watching the tape at the time but I'm suspecting a large buyer or buyers at the lower end here. Will have to confirm on a tape replay on TOS. I was thinking of adding again to the position but the EQ and price basing was pretty extended. I'd prefer short continuation with more brief consolidation and a move away from vwap.
Key learning experience : I remember Dr. Steenbarger talking about being able to flip trading plan positions at the moment the market tells you. This is a case where I had a long and short plan. The long was presenting itself in the pre-market but at the open it quickly changed. The ability to recognize that and execute accordingly was the ah ha moment in a trading career he described. That is somewhat of the experience I learned here and take away.
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